Qatar Holdings to invest $1 billion in European Goldfields

Reuters Staff

2 Min Read

ATHENS (Reuters) - Qatar’s sovereign wealth fund will invest $1 billion in European Goldfields EGUq.L EGU.TO including $600 million to finance operations in Greece, where the London-based firm has a permit to mine gold, the fund’s head said on Saturday.

It was the second major investment in Greece by the Gulf state in two months. Qatar struck a deal in August to provide funding for a merger of two of the recession-hit country’s largest banks.

Greece, which is in dire need of private investment as its worst recession in four decades is seen extending into next year, has long sought to convince the wealthy emirate to invest in its private and public companies.

Qatar Holdings will buy a 10 percent stake in European Goldfields from Greek building firm Ellaktor (HELr.AT) and has a call option to buy another 5 percent, CEO Ahmad al-Sayed said after a meeting between Greek and Qatari officials in Athens.

“In total, we will invest in the company about $1 billion,” Sayed told reporters.

Sayed also said Qatar was “examining different opportunities in the country.”

Greece granted European Goldfields a long-awaited permit in July that allows it to mine for gold in the north of the country, a move set to turn the London-based firm into the European Union’s largest primary gold producer.

The European Goldfields deal was announced after Qatar’s Emir Sheikh Hamad bin Khalifa al-Thani met Prime Minister George Papandreou in Athens on Saturday.

“Qatar’s investments show trust in the Greek economy,” Papandreou told a news conference after the meeting.

Qatar’s investment in Greek banks in August will give it about 17 percent of the lender that will be created by the merger of Alpha Bank (ACBr.AT) and Eurobank EFGr.AT.

Paramount, a company controlled by Qatar, will own the stake after taking part in a 1.25 billion euro rights offer and fully taking up a 500 million euro convertible bond issue.